Gold price poised for sixth straight weekly drop, Fed rate hike view drags

Singapore (Nov 27)  Gold dipped towards its lowest level in nearly six years on Friday and was on track for a sixth straight weekly decline, weakened by a robust dollar and expectations of a U.S. interest rate hike next month.

The dollar was trading near an eight-month high against abasket of major currencies, boosted by euro weakness and prospects of higher U.S. rates. The Federal Reserve is widely expected to hike U.S. rates for the first time in nearly a decade when it meets next in December. Investors believe higher rates could dent demand for non-yielding bullion, while boosting the dollar.
"Once again, gold is unable to find a bid. Any small rally
that we see is being sold into," said a Sydney-based precious
metals trader.
    Buying out of top consumer China has been good but has been
unable to support prices, the trader said.   
    Spot gold had fallen 0.4 percent to $1,067.35 an
ounce by 0644 GMT, edging close to $1,064.95 reached last week,
the metal's lowest since February 2010.
    The metal is down nearly 1 percent for the week. U.S. gold
futures were also headed for a sixth consecutive weekly
decline.
    Buying in China has picked up in recent days due to the
lower prices. Premiums on the Shanghai Gold Exchange, a proxy
for demand in top consumer China, were trading at $5-$6 an
ounce, versus $3-$4 at the beginning of the month.
    However, other indicators of physical demand were not
upbeat. India's gold buying in the key December quarter is
likely to fall to the lowest level in eight years, hurt by poor
investment demand and back-to-back droughts that have slashed
earnings for the country's millions of farmers.
    China's net gold imports from main conduit Hong Kong fell in
October from a 10-month high reached in the previous month, data
showed on Thursday.
    Investor sentiment was weak with precious metals funds
posting their biggest net outflow last week in around four
months, according to Bank of America Merrill Lynch.
    Among other precious metals, silver, platinum
and palladium were all heading for weekly declines.   

Source: Reuters